ARCHIVES: This is legacy content from before Marketing Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Marketing Dive site for the latest marketing news.

Mobile coupons address mood of the moment: frugality

Domino's Pizza's decision to give its franchisees the opportunity to offer mobile coupons is a step in the right direction. More retailers and marketers should follow its example to offer value to increasingly cost-conscious consumers.

One of the effects of this flat-lining economy is the growing attraction of frugality and thriftiness across all classes of society. Vanishing jobs and the threat of losing homes have, at least in the short run, curbed the urge to spend.

In fact, even basic purchases are scrutinized the way lavish expenditures once were. Which means that customer loyalty is at an all-time low, and marketers will have to pull every incentive out of the bag to keep that business.

It is here that mobile coupons have a constructive role to play, both in rewarding loyal customers and also in ensuring repeat business in a hardscrabble market. Almost everyone likes a deal, discount or to be recognized and treated as special, and even more so now.

Food for thought
Fast-food chains such as Domino's (see story), Papa John's (see story), McDonald's (see story) and Subway (see story) deserve credit for being among the early adopters of the mobile channel. They use mobile for ordering directly from the handset or to serve coupons.

But what these restaurant franchises should be commended for is the use of mobile to drive traffic back to the store. That is where mobile's optimum use lies: giving legs to other retail channels.

Interestingly, it is not often the corporate headquarters that initiates the use of mobile coupons. Local franchisees take it upon themselves to attract neighborhood business by publicizing keywords and SMS short codes on inserts and mailers, in-store and via radio broadcasts.

Even smaller chains such as Big City Burrito in the Denver area have found that mobile coupons drive traffic to the restaurant.

Granted, consumers are enticed by the buy-one, get-one-free offer or buy-one, get-50-percent-off-on-another promo. The idea, however, is to get the consumer in store, sample the product and then make an informed decision the next time round when he or she is about to buy or prepare a meal.

Mobile coupons can take the form of simple SMS text messages showed at the cash register after completing the opt-in process.

Another option is the consumer taking a photograph of the coupon icon or bar code off a print ad or poster via a camera phone and then presenting that image at the cash register or emailing it to the marketer.

Retailers can also use QR codes, more popular in some markets overseas.

Education is key
Still, there are several hurdles to mobile coupon adoption.

First is the lack of education among retailers.

Vendors must do a better job of illustrating the mobile coupon's advantages over the online or print coupon -- no paper or printing costs, ease of delivery and building an opted-in database of consumers in the channel where they spend so much time each day.

Second is the need to educate consumers.

Not only do consumers need to know how to sign up for mobile coupons, but also how to redeem them. They need to know if they will incur any text charges for entering mobile coupon programs. And they need to know that their permission will not be abused.

In other words, retailers must establish the frequency of offers at opt-in and make the opt-out process transparent and easy.

Next is the inadequacy of point-of-sale systems to redeem mobile coupons.

Retailers, especially supermarket chains and mass merchandisers, will have to spend millions of dollars to equip their checkout counters with the right scanners that can read bar codes or SMS messages off mobile phone screens even with the glare.

Asking retailers to spend any money in this environment is going to be tough, but this is soon not going to be a choice. Consumers will expect to join mobile coupon programs that work seamlessly across supermarkets and retail stores where they shop.

Finally, there is the tracking issue.

Again, the POS systems will have to be well-integrated with backend infrastructure to ensure an accurate, fraud-resistant record of coupons redeemed for the retailer's accounts -- consumer packaged goods brands or electronics companies, for example -- to make payments.

The good news is that mobile coupons increasingly will be seen as yet another value-offering to customers. So, mobile service providers should keep that in mind when pitching retailers who are doing everything in the playbook and beyond to keep the lights on in the store.